BHP Delivers Strong Copper and Iron Ore Performance as Growth Projects Advance and Capital Flexibility Improves

About BHP Group

BHP Group Ltd (ASX: BHP) is one of the world’s largest diversified mining companies, with exposure across copper, iron ore, steelmaking coal, energy coal and potash. The latest operational review highlights the strength of its existing portfolio while also underlining where future growth is expected to come from, particularly in copper and potash. The group’s near-term investment case remains anchored in low-cost, large-scale assets, while the medium-term story is increasingly centred on long-life copper expansion and the staged development of Jansen in Canada.

Copper remains the central growth engine

Copper continues to sit at the heart of BHP’s growth strategy, and the latest result reinforces that direction. Group copper production for the nine months reached 1,460.9 kt, down 3 per cent year on year, but BHP now expects full-year FY26 copper production to land in the upper half of its unchanged 1,900 to 2,000 kt guidance range. That confidence reflects stronger contributions from Escondida and Antamina, which more than offset weaker performance at Spence. Copper prices have also been supportive, with BHP reporting an average realised copper price of US$5.47/lb for the year to date, up 31 per cent on the prior corresponding period.

Escondida remains the key driver. Total copper production there reached 949.3 kt for the nine months, down 3 per cent on lower planned feed grade, but the asset still delivered record material mined and record concentrator throughput, alongside improved recoveries and stronger cathode output. BHP continues to guide to 1,200 to 1,275 kt for FY26, now expecting output at the upper end of that range. Importantly, Escondida’s unit cost guidance has improved materially to US$1.00 to US$1.20/lb from the prior US$1.20 to US$1.50/lb, reflecting strong operational delivery and a higher contribution from by-product credits.

Spence, however, remains the clear weak point in the copper portfolio. Production at Pampa Norte fell 19 per cent year to date to 158.1 kt, with BHP pointing to ore complexity, variability and declining grades as ongoing challenges affecting both the concentrator and cathode plant. As a result, FY26 production guidance has been cut to 210 to 220 kt from 230 to 250 kt previously. The company is planning upgraded flotation cells to help improve processing and recoveries, with a potential final investment decision in the first half of FY27.

Copper South Australia provided a more constructive offset. Production rose 3 per cent year to date to 230.5 kt, supported by strong operating performance and record output metrics at Olympic Dam, including record material mined, ore milled and concentrate smelted. Carrapateena also delivered record material mined in the third quarter, helping support the broader South Australian copper complex. Antamina was another bright spot, with copper production up 19 per cent to 116.2 kt, driven by higher planned feed grades and improved operational performance. BHP has accordingly lifted Antamina’s FY26 copper guidance to 150 to 160 kt from 140 to 150 kt previously.

Copper growth projects continue to move forward

Beyond current production, BHP continues to advance key copper growth options. The most important near-term step was the submission of the Environmental Impact Declaration permit for the Escondida New Concentrator, the centrepiece of Escondida’s growth program. BHP said the project is expected to require investment of between US$4.4 billion and US$5.9 billion and deliver 220 to 260 ktpa of copper, more than offsetting the production capacity of the existing Los Colorados plant. Subject to permitting, the project is expected to progress toward a final investment decision in calendar 2027 or 2028, with potential first production in calendar 2031 or 2032.

Resolution Copper also reached an important milestone, with completion of a land exchange in Arizona allowing the joint venture to advance further resource data collection and begin early underground development. BHP framed this as a key step in progressing one of the world’s largest untapped, high-grade copper resources toward mine design and feasibility study completion. Taken together, these developments reinforce BHP’s strategy of building future copper supply through long-life, large-scale and high-quality assets.

Iron ore remains highly reliable

Iron ore continues to provide BHP with a stable and highly cash-generative base. Group iron ore production rose 2 per cent year to date to 196.6 Mt, with guidance unchanged at 258 to 269 Mt for FY26. WAIO produced 190.7 Mt for the nine months, up 1 per cent, and achieved record production. BHP attributed this to record material mined, inventory drawdown, strong output from the Central Pilbara hub and improved port and rail performance following completion of the CD3 rebuild and reduced tie-in activity on the Rail Technology Program. South Flank also exceeded annualised nameplate capacity.

The quarter itself was softer because of tropical cyclone impacts, but BHP’s full-year iron ore view remains unchanged. Samarco was also stronger, with production up 37 per cent year to date to 5.9 Mt, and BHP now expects Samarco to deliver at the top end of its 7.0 to 7.5 Mt FY26 guidance range. That gives the group further support within its broader iron ore portfolio.

Coal remains mixed, while potash continues to build

In steelmaking coal, BMA produced 13.0 Mt year to date, up 1 per cent, but BHP expects full-year production in the lower half of the unchanged 18 to 20 Mt guidance range. The company also now expects BMA unit costs to sit at the top end of the existing US$116 to US$128/t range, reflecting wet weather, geotechnical issues and mine sequencing impacts. NSW Energy Coal was stronger, with production up 11 per cent year to date to 12.2 Mt, and BHP expects NSWEC output in the upper half of its 14 to 16 Mt guidance range.

Outside the current production base, potash remains the other major growth pillar. Jansen Stage 1 in Canada is now 78 per cent complete, with first production still targeted for mid-calendar 2027. Jansen Stage 2 is 15 per cent complete, with an update expected in the fourth quarter of FY26 and first production still targeted for FY31.

Capital discipline and leadership transition add to the picture

BHP also used the period to extract value from non-core assets. It completed a silver streaming transaction with Wheaton Precious Metals for upfront consideration of US$4.3 billion and finalised the Carajás divestment, receiving US$240 million on completion plus the potential for up to a further US$225 million in contingent payments. Together with cash received from earlier divestments of Blackwater and Daunia, BHP said it had realised around US$4.8 billion in the last month.

At the same time, the company is preparing for a leadership transition. Brandon Craig will become chief executive officer and a director from 1 July 2026, succeeding Mike Henry after six and a half years in the role. BHP highlighted Craig’s more than 25 years of operational and corporate leadership experience and his recent role as President Americas, during which BHP became the world’s largest copper producer and advanced major growth options in copper and potash.

Outlook

BHP’s latest operating update points to a company in a strong position. Iron ore remains dependable, copper is performing well enough for the group to expect output in the upper half of guidance, and major copper growth projects continue to progress. Spence remains a drag, and coal is still mixed, but the group’s portfolio strength, recent capital releases and low-cost operational base are helping offset those pressures. With Brandon Craig set to take over from July and a significant pipeline across copper and potash still moving forward, BHP enters the next phase with reliable operations, solid balance sheet flexibility and a clearer emphasis on long-term copper-led growth.